International trade expertise
Lloyds Bank Commercial Banking has a number of trade specialists around the country, supporting the relationship teams and working closely with the Bank’s international trading customers. David Weatherhead, Regional Trade Director, London and South Transaction Banking, Commercial Banking explains that by seeking to understand the full workings of its customers, the Bank is well-placed to offer the right service, insight and banking solutions to support their growth.
International trade will play an important part of the UK economic recovery and in recent years, more and more businesses of all sizes have relied on suppliers and customers in overseas markets to play a role in their revenue, growth and supply cost strategies.
With partners in more than 100 countries, the Bank’s experienced team works hard to ensure those businesses who do use export markets do so with confidence. Across the Bank, we place a great emphasis on spending time with those clients, building a timeline assessment upon which to base strategies, banking solutions and the working relationship.
Initial assessment to understand customer needs
That initial timeline assessment evaluates our customer’s full trade cycle to ensure everything they do as a business is plotted. We get a full understanding of where they are buying from or selling to, an understanding of the company's true supply chain and how we can assist in that.
After establishing a timeline, the way a business brings its goods into the marketplace is analysed –certain ways of bringing goods into a country provide us with more security and more control, for the benefit of the customer. We also assess who the company is selling to and the selling mechanisms in place, as through that evaluation, we can establish whether there is a funding gap.
Financial solutions to meet customer needs
Through this full evaluation of the customer timeline, we are best able to tailor the right banking solutions for each specific business. The trade cycle analysis is the key to that understanding, as it dictates the best solution possible for their needs, while supporting their long term growth and sustainability ambitions.
We place a great emphasis on providing bespoke solutions for our customer’s individual needs, bringing in specific experts and teams to support overseas ambitions based upon our assessments, in both risk management and working capital solutions.
Risk management solutions
Trading overseas invariably carries risk and we help our customers understand the broader commercial environment and local economic conditions within which they’ll operate, to help keep their business safe. Fluctuating foreign exchange rates, for example, can turn a healthy profit into a loss, but by understanding their commercial risk, we can play our part in mitigating against financial and credit challenges.
To support the prompt payment of goods exported or the timely and specified reception of imported goods, the Bank therefore offers a series of risk management services, including:
- Documentary Collection, to simplify payments between partners
- Letters of Credit to eliminate country, counter party and bank risk by adding the Bank’s agreed understanding to that of an issuing bank
- Guarantees and Bonds to support a company’s ability to perform under contract and underpin new business wins
- Foreign Exchange Service to help mitigate exchange rate risk by customising pricing displays to help alert optimum trade times.
Working capital management solutions
Optimising working capital with responsive, flexible finance is crucial to overseas business as international trade can put additional pressure on working capital both before and after shipment.
By working with a business to understand its full end-to-end trade cycle, the Bank’s working capital solutions can help plug any funding gaps with:
- Supplier Finance, to obtain earlier payment of invoices
- Pre-Shipment Finance to provide capital to produce and ship goods
- Post-Shipment Finance to give capital to fund further operations and contract
- Import Finance to provide short-term finance to pay suppliers promptly, even when waiting for onward sale of goods.
A bank supporting overseas trade
What these solutions show is that businesses trading overseas need comprehensive support from a bank that truly understands its needs. As one of the world’s leading financial companies, Lloyds Bank has that experience, scale and knowledge.
Through 2013, we have been very focused on both the manufacturing and export markets, with a very obvious cross over between the two. This focus on export is in line with government aspirations of re-establishing the UK economy through overseas trade, and their desire to double UK exports to a goal of $1trn by 2020.
While maintaining a strong presence for businesses trading overseas, our international focus is balanced by a similar emphasis on supporting domestic markets. Throughout this year, Lloyds Bank has had a spread of transactions supporting the UK markets, and we are constantly evaluating our customer’s needs to suggest different banking solutions to match our expertise and products to each businesses’ unique and ever changing needs.